Chinese Lithium Buyers Finally Arrive in North America

A new era of Chinese lithium interests in Canada has begun, with the conclusion of a $135 million investment, by Shanghai-based Sinomine Resource Group of Cabot Corporation (NYSE:CBT) of its Specialty Fluids business, including the TANCO Lithium Mine in Manitoba. The impact of the acquisition has the potential to reach other North American lithium companies, in particular QMC Quantum Minerals Corp. (TSX.V: QMC) (OTC: QMCQF) located just 20km to the North of the project. Other lithium players in North America that could be impacted include Albemarle Corporation (NYSE:ALB), Nemaska Lithium (OTC: NMKEF) (TSX: NMX), and Frontier Lithium Inc. (TSX.V:FL) (OTC:HLKMF).

The Sinomine entry is not the only Chinese interest that has entered the North American continent as of late. Lithium-ion battery producer Ganfeng Lithium recently acquired interests in clay deposit projects for the purpose of lithium production in Mexico—which SRK Consulting has estimated to contain a total lithium carbonate equivalent of 8.8 million tons.

Despite recent lithium price fluctuations, interest in the white metal remains at a historical all-time high, compared to decades past. Roughly 20km to the North of Sinomine’s newly acquired TANCO Lithium Mine, is another historic mine (the Irgon Lithium Mine) that’s being brought back to prominence by QMC Quantum Minerals Corp. (TSX.V: QMC) (OTC: QMCQF). Presently, the property has a historical (non-compliant) resource estimate of over 1.2 million tons grading 1.51% Li2O over a strike length of 365 metres and to a depth of 213 metres—which QMC is currently working diligently to upgrade to modern day NI 43-101 resource compliance.

Along the path to modernization, QMC has received friendly assistance from its TANCO neighbours (previously owned by Cabot), including access to cores from a 1978 drill program, which returned recent assay results that included an intersection of 2.97% Li2O over 1.22 metres.

Two additional sample intervals from drill holes on the Central Dike were re-assayed at 1.50% over 1.52 metres and 1.04% over 1.52 metres. The results strongly supported the fact that both the Mapetre and the Central Dikes on remain excellent targets to add to the total tonnage available on the Irgon Property.

For reference, SGS Canada when determining a Mineral Resource for the Whabouchi Mine, developed and being constructed by Nemaska Lithium (OTC: NMKEF) (TSX: NMX) in Quebec used a cut-off grade of 0.43% Li2O.

Currently, the only company commercially producing lithium in North America is Albemarle Corporation (NYSE:ALB), at its Silver Peak, Nevada production facility. Albemarle also has extensive US production capability in North Carolina, Tennessee, and Nevada.


Over the last 50 years, Canada’s mining community has known about the multiple lithium-bearing areas across the country. Historically, the potential has always been there, however, economically it has only recently become a viable proposition.

Despite recent cost-overrun complications, Canada’s next lithium producer, the Whabouchi Mine from Nemaska Lithium (OTC: NMKEF) (TSX: NMX) in Quebec, has recently received renewed interest from financiers. London investor Pallinghurst Group has pledged CAD$200 million in financing for Nemaska, that’s also backed by Japan’s SoftBank. The initial LOI pledges the CAD$200 million, as well as a rights issue of up to CAD$400 million to build the lithium mine and processing plant.

Back in February, Ontario-based Frontier Lithium Inc. (TSX.V:FL) (OTC:HLKMF) confirmed high-grade lithium on a historical showing on its PAK Lithium Project. QMC Quantum Minerals Corp. (TSX.V: QMC) (OTC: QMCQF) also confirmed spodumene back in February on its first holes on the Irgon Lithium Project.

What perhaps makes the Irgon Mine stand out, is the proximity to newly arrived Chinese interests. As recently as last year, Canada’s distance from China was cited as a concern for future lithium development.

Now as Sinomine sets up shop in Manitoba, previous owners Cabot Corporation (NYSE:CBT) receives $135 million along with additional cash considerations. This includes royalties of up to $5 million for lithium products, which is payable over a 10-year period.

The significance of the lithium royalty points to Sinomine’s intention to produce products beyond the facility’s current cesium assets.

Which points back to potential lithium suppliers, with QMC Minerals only 20km to the North.
QMC Minerals has already confirmed a significant spodumene (hard rock lithium) mineralization from historical drill cores on its Irgon Property in the province of Manitoba.

To date, QMC has been very pleased with the project’s overall results as they confirm continuation to depth of the spodumene mineralization previously identified by the company’s surface sampling. The results demonstrated that there is significant exploration potential for the Irgon Property to host other large, spodumene-bearing pegmatite dikes, in addition to the Irgon Dike, as the Central and Mapetre Dikes are located on opposite ends of a 1,100-metre (3,600-foot) long, 100-metre (328-foot) to 350-metre (1,148-foot) wide target.


During its ongoing Irgon drill program, Cabot had provided QMC the opportunity to evaluate and re-sample the stored drill core derived from a 1978 TANCO Mine drill program. Given the proximity, it made sense to work together, for the potentially enhanced increase in value on both properties.

Visual spodumene was indeed identified in the 1978 logs, while QMC’s re-sampling confirmed that pegmatite was intersected in all drill holes for which the core was available.

Work on the project dates back even further to 1953-54, when Lithium Corporation of Canada Limited drilled 25 holes into the Irgon Dike and subsequently reported a historical mineral estimate of 1.2 million tons grading 1.51% Li2O over a strike length of 365 metres and to a depth of 213 metres—It must be stressed that this is a non-compliant resource at this time.

Also of note, historical metallurgical tests reported an 87% recovery from which a concentrate averaging 5.9% Li2O was obtained.


While it’s been decades in the making, the project does have what can be considered near-term production potential, thanks to substantial development work already carried out by the property’s former owners, The Lithium Corporation of Canada Ltd.

This development work has resulted in significant infrastructure bonuses already attached to the project. Regional infrastructure (rail, water and electricity) are nearby again due to the TANCO mine’s location 20km to the south, all the while provincial Highway 314 transects the property.

Situated within a world-renown rare metal pegmatite district, the Irgon project is a low-cost lithium asset located in a highly desirable jurisdiction.


As of the date of publication, Albemarle Corporation (NYSE:ALB) is the only company currently producing lithium in North America. Back in May, the US Senate gave Albermarle a domestic boost, by holding a hearing on the American Mineral Security Act, which was intended to streamline regulation and permitting requirements for the development of mines for lithium and other EV minerals. 

The hearing’s legislation doesn’t have direct impact on Canadian projects, such as those of Frontier Lithium Inc. (TSX.V:FL) (OTC:HLKMF), Nemaska Lithium (OTC: NMKEF) (TSX: NMX), and QMC Quantum Minerals Corp. (TSX.V: QMC) (OTC: QMCQF).

With the sale of its Specialty Fluids business to Sinomine, Cabot Corporation (NYSE:CBT) is officially stepping aside, in terms of potential lithium development in Canada, for the time being.

Ontario-based Frontier Lithium Inc. (TSX.V:FL) (OTC:HLKMF) recently closed a $2 million financing, which will be used to advance its 100%-owned PAK Lithium Project in the mining district of Sudbury. The PAK deposit has a current Measured and Indicated Resource of 7.5 million tonnes of 2.02% Li2O and an inferred Lithium Resource of 1.8 million tonnes of 2.10% Li2O.

In Quebec, Nemaska Lithium (OTC: NMKEF) (TSX: NMX) looks to have found a solution to its financing challenges on its Whabouchi Lithium Mine construction, through a combined CAD$600 million investment proposal from the Pallinghurst Group. The Whabouchi Mine investment is in line with Pallinghurst’s desire to focus exclusively on critical batter and fuel-cell related materials supplies.

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